WCF REST Service Directory Security Attributes

Hi ,

I am working on a REST based WCF service. The service is hosted using basic authentication over SSL. When i using the HTTP Requests, the request is serviced  correctly and I am getting the expected response.

However the problem arises when i am using the HTTP POST, PUT methods. Initially I was getting the "Method Not allowed" error. I got this one resolved by removing the WebDAV from the handlers section in the web.config. 

Now I am getting "401 Unauthorized" error while making the PUT and POST Request. 

I could find below error in the event logs:   <Data>File authorization failed for the request.</Data> 

Later I resolved the error by providing "read,write,execute" permissions for "everyone" for the directory containing the service file. But I don' think it's a good approach to provide access everyone.

What would be the right approach to set the security attributes for the folder ? Are there any alternatives?

thanks,

Manoj